–The U.S. states, counties and cities are PIIGS

Mitchell’s laws: Reduced money growth never stimulates economic growth. To survive long term, a monetarily non-sovereign government must have a positive balance of payments. Austerity breeds austerity and leads to civil disorder. Those, who do not understand the differences between Monetary Sovereignty and monetary non-sovereignty, do not understand economics.
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The euro nations, five of which are referred to as the PIIGS (Portugal, Italy, Ireland, Greece, Spain), are in deep financial trouble because years ago they voluntarily surrendered the single most valuable asset any nation can have — Monetary Sovereignty — and this problem is exacerbated by being net importers.

As monetarily non-sovereign nations they are not able to create their sovereign currency (they don’t have a sovereign currency, in that the euro is not sovereign), and as net importers they see euros continuously drained from their economies. (Germany, a euro nation, prospers because it is a net exporter, thus draining euros from its neighbors).

Those two economic problems, monetary non-sovereignty exacerbated by net importing, are identical to the situation in which the American states, counties and cities find themselves. For the euro nations, there are two, and only two, long-term financial solutions:

1. Return to Monetary Sovereignty by re-adopting their sovereign currencies
or
2. The EU to give (not lend) euros to member nations as needed.

For the American states, counties and cities, the number of long-term solutions comes down to #2: The U.S. government to give, not lend, dollars as needed.

The Washington Post
States face bleak economic forecast, report says
By Michael A. Fletcher, Published: November 28

States are caught in a fiscal vise as weak economic growth, dwindling federal help and increasing appeals from hard-pressed local governments squeeze their budgets.
[…]
The Fiscal Survey of States says that even as states struggle with tepid revenue growth, they will be called on to spend more because of the economic distress caused by continued high unemployment.

“State budgets are certainly improving; however, growth is weak, and there is not enough money for all the bills coming in,” said NASBO Executive Director Scott Pattison. “State officials will still be cutting some programs, and increases in funding for any program except for health care will be rare.”

It is mathematically impossible for any monetarily non-sovereign governments — whether states, counties, cities or PIIGS — to survive long term, without money coming in from outside their borders.

Relying on internal taxes for support is a losing proposition. As inflation-adjusted dollars are drained from a state, either via imports or inflation, fewer tax dollars are available. This produces a downward helix of fewer dollars begetting greater needs, requiring even more tax dollars.

The counties and cities must have state support, while the states must receive federal support. However, the deficit-cutting frenzy in Washington makes federal support of the states difficult, if not impossible.

The report says that Medicaid, the combined federal-state health program for the poor and the disabled, will place the biggest budgetary burden on states. Because of increasing caseloads, declining federal help and spiraling health-care costs, state Medicaid spending is growing much faster than state revenue, crowding out funding for other priorities.

The federal government had provided extra Medicaid help to states as part of the stimulus program. But that help has ended, prompting states to increase their Medicaid spending by an average of 29 percent this fiscal year, according to the Kaiser Family Foundation.

Many states have streamlined their Medicaid programs in an effort to control costs. Still, officials in more than half of the states said in a recent survey that there is an even chance that their Medicaid programs will face a budget shortfall as enrollment continues to increase.

The monetarily non-sovereign states simply cannot afford to pay for Medicaid, nor should they. This program should be folded into Medicare and supported by our Monetarily Sovereign, U.S. government, which easily can afford to do so. Keep in mind that Medicare is not supported by FICA. No federal program is supported by taxes. That is one of the truths of Monetary Sovereignty. So for the federal government to assume all Medicaid payments would not require taxes to be increased by even one dollar.

States are also struggling to meet the needs of local governments. Many states cut aid to localities during the recession, and many of them want it restored.

Ultimately, our lives are local. We urgently feel the effects when our city or village is unable to maintain roads, sewers, water, police, fire protection, zoning and other local initiatives. These are the problems local governments should care for, not national problems like Medicaid and other unfunded federal mandates. There, in fact, should be no unfunded federal mandates.

In addition, states are bracing for further reductions in federal aid that are likely to come from Washington’s efforts to slow the growth of the deficit.

The fiscal pressure on states has become a drag on the job market; local and state governments are shedding jobs, even though the private-sector job market has shown signs of improvement.

State and local governments have cut 455,000 jobs since the beginning of 2010, and public-sector jobs account for the smallest share of the nation’s employment since the 2008 financial crisis, according to the Bureau of Labor Statistics.

The U.S. states, like the PIIGS, are in deep trouble, and for exactly the same reason: They are monetarily non-sovereign and are not receiving sufficient help from their sole Monetarily Sovereign source, the central government.

Unless Congress and the President come to their senses, and begin to understand the facts of Monetary Sovereignty, the states will suffer the same fate as the euro nations: Insolvency leading to chaos. The euro nations are more fortunate in that they have the alternative of leaving the EU. The U.S. states are stuck in that they don’t have the alternative of leaving the Union.

Or do they?

Rodger Malcolm Mitchell
http://www.rodgermitchell.com

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No nation can tax itself into prosperity, nor grow without money growth. Monetary Sovereignty: Cutting federal deficits to grow the economy is like applying leeches to cure anemia. Two key equations in economics:
Federal Deficits – Net Imports = Net Private Savings
b>Gross Domestic Product = Federal Spending + Private Investment + Private Consumption + Net exports

MONETARY SOVEREIGNTY

–Is Newt Gingrich a closet Democrat?

Is Newt Gingrich a closet Democrat?

In 2003, he founded the Center for Health Transformation (CHT), a collaboration of public and private sector leaders dedicated to the creation of a 21st Century Intelligent Health System that saves lives and saves money.

(See: Center for Health Transformation.)

His site further says:

Under his leadership, Congress passed transformational legislation including welfare reform, the first balanced budget in a generation, funding to strengthen our defense capabilities, and the first tax cuts in sixteen years.

Amazing! Newt Gingrich led Congress to balance the budget, while increasing defense spending and cutting taxes. Although balancing the budget is nothing to crow about, (It led to the 2001 recession — as budget cuts invariably do — cured only by the Bush deficits), I’m fascinated with the math that allows tax decreases plus spending increases to equal a balanced budget. Anyone think there may be some numbers missing from Newt’s self-written adulation?

But the most interesting part is what Gingrich says on the page titled “Insure All Americans,” a notion that must be anathema to those conservative, self-reliant Republicans. Here is a selection of his goals and solutions:

We agree in principle with the idea that it is good for all Americans to have health insurance – it encourages improved health and lowers costs within the system. However, this coverage should come via private sector and state mechanisms, and not as the result of a federal government mandate that forces every American to purchase health insurance.

Not sure what those “mechanisms are, but O.K., it sounds suitably right wing. Yet, just below that statement, one of Newt’s listed “solutions” is:

Require that anyone who earns more than $50,000 a year must purchase health insurance or post a bond.

Huh? That $50,000 is pretty inclusive. It digs deeply into the middle class. In fact, close to 40% of all Americans filing tax returns earned $50,000 or more – quite a departure from his right-wing, anti-mandate declaration. And with the implied, income-based evaluation, he sounds awfully much like one of those (ugh) liberal Democrats.

Another solution Gingrich puts forth:

Design insurance products to reward healthy lifestyles and wellness and penalize poor health.

“Penalize poor health”?? An insurance product that penalizes poor health? The sicker you are the more you are penalized? This is a solution? Think about that one for a bit.

And then there’s:

Make the management of chronic disease the priority of public programs such as Medicare and Medicaid.

I’m not sure how this “penalizes poor health,” but it’s a good idea – except that it seems to say all the persistent and long-lasting and expensive diseases (the definition of “chronic poor health”) – cancer, heart disease, birth defects, autoimmune diseases et al — would be covered by public Medicare and Medicaid, while little stuff like sniffles and rashes would be covered by private insurance.

Can such a system actually work? Doesn’t sound very private-industry, self-reliant, right-wing Republican to me. Sounds more like the public solution a Democrat might favor.

And then there’s:

Encourage the use of personal health records for portals to health education, cost and quality data, and personal health histories.

Wow, Newt! Talk about a Democrat, “big brother, big government” solution. The Tea/Republican, right-wing should have a fit. Again, it has the smell of the liberals hanging all over it.

But finally:

Enlist faith-based organizations to educate the value of personal responsibility, health, and wellness.

Ah, solidly right-wing Republican. Give money to religious organizations to do whatever, rather than have the government do them. Breach the wall between religion and government. One small step for religion; one giant step for theocracy.

So, I guess Newt is not a Democrat after all. He’s a right-wing, conservative, big-government liberal, walking both sides of the fence. You know what happens when you walk both sides of a fence? Visualize it.

Rodger Malcolm Mitchell
http://www.rodgermitchell.com

MONETARY SOVEREIGNTY

–Do you want an austere America? Be careful what you wish for

Lest you believe that the Tea Party Patriots and the Republicans are purely political groups, who preach patriotism, fiscal responsibility, the Constitution and the free market, think again. While they use those words, many of them believe in a religious fundamentalism, completely at odds with what you may think those words mean.

Their “patriotism” does not mean love of our nation, for they wish to minimize or eliminate the very government that makes our nation possible. Their “fiscal responsibility” is a fiscal cruelty that would deny help for the needy. The “Constitution” is the antithesis of their beliefs, since they do not accept the dominance of civil law. And their “free market” is free only for the very wealthiest among us. The oil, coal and railroad barons of yesteryear believed in that version of a “free market.”

Background: In every group, the extremists define the agenda and the words to describe it. They are the loudest, most assured, most demanding sect, and view themselves as the “true” believers, with all others being lesser versions or even infidels. Thus, for conservatives, Christian Reconstructionism sets the agenda. It believes civil law must conform to their interpretations of biblical law. They preach a Calvinist, austere, hardhearted America.

Christian conservatives are akin to those Muslims who believe civil law must conform to Sharia law. Both tend to theocratic ideals, with the civil government being reduced or eliminated altogether, in favor of religious interpretations and religious administration of all law. The common claim, “America is a Christian country,” merely is a way to say, “If you’re not Christian (my kind of Christian), you aren’t American and don’t deserve to be treated like an American.”

The Tea Party’s call for less taxing and smaller government is a direct result of this theocratic fervor.

Applying ancient interpretations of religious law to modern life leads to a cruel, austere, arbitrary, pitiless world, in which human needs and desires are suppressed by a dictatorial priesthood, often harsher than the most evil, civil dictatorships. The extreme right believes there should be a Christian theonomy, where God is the source of ethics, as interpreted by the priests, not by civil law, similar to the Taliban teaching and enforcing of Sharia.

Under Christian Reconstructionism, the death sentence would be applied to adultery, homosexuality, incest, bestiality, pretending to be a virgin, idolatry, witchcraft, blasphemy, false accusations, false prophesying, kidnapping, and rape. Because the vast majority of humankind, including most religious leaders, has engaged in a least one of these “crimes,” the priesthood would have wide latitude to punish by death anyone they choose.

The natural result of the belief that God’s law supercedes civil law, is the belief that governments are immoral, so civil laws are immoral, and obeying civil law is optional. From this evolved the evangelical, home schooling movement, which is related to the notion that man’s science is immoral.

All the above has a powerful political outcome. For example, the vitriol against using embryonic stem cells for research that can save lives, is based on “God above man,” “God above science” beliefs. Though there is no scientific (or even biblical) basis for claiming that an embryonic stem cell is a human being, and that killing this invisible-to-the-naked-eye cell is murder, religious extremists interpret everything according to their vision of their bible, including the belief theirs is “the one true religion.”

The result: Many thousands of unfortunate women forced to carry babies they neither want nor can care for; many thousands of unwanted children born into poverty, crime and disease; many thousands of sick people not cured – a great mountain of misfortune and misery, none of which concerns those of the extreme right, for theirs is not a human morality, but a religious one.

Which is why they so willingly preach harsh austerity, for their neighbors and for their nation (their claims of “patriotism” notwithstanding).

The anti-government preaching of the right has dire consequences for America. It is consistent with the anti-science teaching of creationism, leading to acceptance of other anti-science such as vaccine conspiracies and naturopathy. Once you doubt science on the basis of religion, you can use the same religion to disbelieve all science, and a return to the dark ages is a small step away.

The cold, lack of concern for human misery and misfortune has other political repercussions:

Under the guise of employment and resource scarcity, a harsh immigration policy, allowing difficult immigration laws and no amnesty.

And, under the guise of “fiscal responsibility”:
An end to, or greatly reduced, Medicare, Social Security and Medicaid
Reduced unemployment coverage
Smaller government and reduced benefits of government

And under the guise of morality:
Intolerance of any abortion for any reason
Intolerance of gays
Misogyny
Mixing of church and state

For a much deeper understanding of the right-wing extremism that has begun to take over our nation, I recommend reading: An interview with Frank Schaeffer

Today’s politics in not left vs. right. It is human empathy vs. cruel biblicality. The most important law forgotten by the right wing religionists is the Golden Rule.

Rodger Malcolm Mitchell
http://www.rodgermitchell.com

MONETARY SOVEREIGNTY

–America’s biggest “super committee”: The Supreme Court and conflicts of interest

The debt reduction “super committee” was a failure by any measure, not only because it failed to agree, but more importantly, because it was designed to fail. It was a purely political organization, whose decisions were to have nothing to do with the underlying facts, but only be a series of political compromises and power plays.

The super committee could have “succeeded,” if that word even can be used, only if one party had held a majority in the committee, in which case, decisions would have reflected the wishes of that party.

Which brings us to the United States Supreme Court.

The Washington Post
Health-care case brings fight over which Supreme Court justices should decide it
By Robert Barnes, Published: November 27

Just a little more than an hour after some House Democrats recently demanded an inquiry into Supreme Court Justice Clarence Thomas’s ethics, Senate Republicans stepped up the pressure on Justice Elena Kagan to take herself out of the court’s decision on the health-care reform act.

The process repeated itself a few days later. House Judiciary Committee Chairman Lamar Smith (R-Tex.) called for the release of more documents about Kagan’s role as President Obama’s solicitor general; the liberal group People for the American Way came out with another broadside against Thomas.

Accusations about both justices, from the left and the right, show no signs of dissipating now that the Supreme Court has said it will review the constitutionality of Obama’s signature domestic achievement, the Patient Protection and Affordable Care Act of 2010.

Arguing about which Justices may or may not have conflicts of interest is like arguing about which religions are best or worst. It’s a ridiculous exercise based on phony arguments leading to a pack of lies.

You have seen images of Lady Justice. Here she is on the lamp posts outside the United States Supreme Court.

She is blindfolded to demonstrate justice being meted out dispassionately and impartially, to indicate judges should be ruled neither by their hearts nor personal beliefs, but only by the law. She holds scales which symbolize how facts for and against each claim are weighed evenly. And she carries a sword to demonstrate her power and ability to cut through to the truth.

That is our even-handed, apolitical Supreme Court, devoid of interest conflicts.

Would that it were so. In truth, the U.S. Supreme Court is no less political, no less conflicted than the Congress or the President.

Consider the “Appointments Clause” (Article II, Section 2, clause 2) which states: “ . . . he (the President) shall nominate, and by and with the Advice and Consent of the Senate, shall appoint . . . Judges of the supreme Court. . . “

Being appointed by the #1 politician in America, subject to the consent of the #1 political body in America, guarantees the appointed Justice will be a highly political creature, which in turn guarantees he/she will be neither dispassionate nor impartial nor without conflicts. Forget the blindfold and the scales. The United States Supreme Court is nothing more than another, highly partisan “super committee.”

And consider the Senate hearings, where each nominee swears he/she has no prior thoughts, ideas, convictions, beliefs or prejudices about anything in the world. To hear them testify, they each are blank slates, having lived apart from humanity, and acquiring no leanings of any kind.

So, the process begins with the nominators denying any political motivation and the nominee lying right along with them, and no one believing any of them — the theater of the absurd.

Perhaps the one difference between the Supreme Court and the super committee, and it is an important difference, is the lifetime appointment. Surprising to many, this nowhere is mentioned in the Constitution, which says only that Justices may hold office “during good behavior.” No Justice ever has been removed for “bad” behavior, though this theoretically is possible.

Which brings us back to the biggest case of the year: The health-care law’s individual mandate, requiring most Americans to obtain health insurance beginning in 2014 or pay a penalty. The Court will decide if the provision is constitutional, whether it can be severed from the rest of the law and whether the penalty is a tax.

A dispassionate evaluation of underlying law will have little affect on the decisions, which ultimately will be based primarily on political motivation. Republican-appointed Justices will tend to lean toward the Republican desire to get rid of so-called “Obamacare,” while Democrat-appointed Justices will lean toward retained the law: Purely political decisions masquerading as even-handed law.

The fact that Justice Roberts agrees with Justice Alito an astounding 96% of the time while agreeing with Justice Ginsburg only 65% of the time (Justice agreement) is not an accident, nor is it a reflection of underlying facts. It reflects the lack of dispassion.

So ignore all the moaning a bleating about which Justice should recuse. None will and none should. They all are what they are: Lying politicians.

Let the games begin.

Rodger Malcolm Mitchell
http://www.rodgermitchell.com

MONETARY SOVEREIGNTY

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